Falling Population Squeezes Taiwan’s Universities

Taiwan’s population is projected to peak at 23.61 million in 2021 and then begin to decrease. The fertility rate of an average of 1.17 children born to each woman is insufficient to maintain the present population level, never mind expand it. Government efforts to boost the fertility rate – primarily in the form of childcare subsidies – have yet to bear fruit. Even if the subsidies are increased, there is no guarantee that Taiwanese will reproduce in greater numbers.

The potential impact of a declining population on the nation’s education system is bound to be enormous, particularly at the university level where there is already a large gap between supply and demand. The Ministry of Education (MOE) estimates that the number of college students will decline by 40% to reach 723,000 by 2028. The reduced number of applicants will affect all universities, but the weakest schools are expected to be hit hardest.

In the 2017-18 academic year, 198 university and college departments failed to recruit any students at all, an increase from 151 the previous year, according to an MOE report last December. Some schools had shockingly low new enrollment rates. The incoming class at Hualien’s Taiwan Hospitality and Tourism University has filled less than 30% of the available places, while the comparable figure at Tainan’s Nan Jeon University of Science and Technology was only slightly better at roughly 32%.

“Some universities may have to close down or transform by merging with other schools,” Minister of Education Yeh Jiunn-rong told Taiwan Business TOPICS in an interview. Mergers could allow schools to pool resources, ultimately boosting their competitiveness, he says.

The cause of the oversupply of universities dates to the early 1990s when Taiwan, still in the midst of an economic boom, allowed technical schools to upgrade their status to become universities. Officially, the goal was to nurture engineering talent as Taiwan evolved into an IT manufacturing hub.

“The government had a fiscal surplus and there was a lot of popular support for the policy – parents wanted their kids to have higher education opportunities that they never had,” says Lu Hsin-chang, an associate professor of international business at National Taiwan University.

Unfortunately, expansion out-stripped demand, with the number of universities increasing more than fivefold in less than 30 years. Amid the supply glut, students with poor entrance examination scores were permitted to enroll. The overall university acceptance rate jumped from 49% of applicants in 1996 to 96% in 2006 and has not fallen significantly since.

“The government didn’t worry about future demand, even though the falling birthrate was already evident,” says Darson Chiu, an economist at the Taiwan Institute of Economic Research (TIER). “Now that everybody gets in, the overall quality of university education has declined.”

For faculty members, it has become difficult to find full-time positions. Given declining enrollment, “schools are not sure they can afford full-time faculty,” he says.

If student enrollment keeps falling, Chiu says, more Taiwanese professors may relocate to China, where they are likely to enjoy better compensation and career opportunities. As part of its “1000 Talents” program aimed at upgrading China’s technology expertise, Beijing reportedly has already recruited 33 academics and other experts from Taiwan. The initiative is known for offering generous packages to participants.

Better compensation could well lure young Taiwanese academics across the Strait, particularly those who have yet to establish themselves in the island’s research community. But the significant structural problems in the Taiwanese economy mean that salaries are likely to remain stagnant for some time to come.

At the same time, increasing numbers of Taiwanese are choosing to study in universities in China, attracted by the potential job prospects in its huge market following graduation. From 2014 to 2016, about 10,000 Taiwanese were enrolled in Chinese universities. Last year, that figure rose to almost 12,000.

The MOE has emphasized that Taiwan does not recognize diplomas from about 30% of Chinese universities. Any Taiwanese students who plan to study at a Chinese university are advised to make sure that Taiwan recognizes diplomas from that school, the MOE says. Otherwise, the Taiwanese students could find themselves in a difficult situation upon returning to Taiwan and looking for work.

Academic integrity

The government has long been aware of the pressures on Taiwan’s university system, but has exercised caution in its handling of the ailing schools. Closures would be contentious, putting teachers out of work and forcing students to change schools. “No politician [in Taiwan] wants to take responsibility for shutting down scores of universities,” says Yang Lian-fu, a historian who has written extensively about Taiwanese society. “They’re afraid it will hurt them at the ballot box.”

In March 2015, the Ma Ying-jeou administration announced that it would encourage public universities to merge while allowing private universities to decide their own future. The exception would be in cases when universities failed to meet minimum standards set by the MOE. Under the plan, the government estimated that 8 to 12 of Taiwan’s 51 public universities and 20 to 40 of its 101 private universities would be merged or shut down by 2023.

Since then, three schools – all public universities in Kaohsiung – have merged. There have been no significant closures.

Yet there have been scandals. In 2016, the Tainan District Prosecutors’ Office indicted Huang Tsung-liang, then dean of the Nan Jeon University of Science and Technology, for allegedly selling fake academic degrees from Costa Rica’s University of Empresarial – not the most obvious choice for a phony diploma. Huang sold doctoral degrees for NT$700,000 and master’s degrees for NT$400,000, prosecutors said. He also offered research papers to instructors for NT$150,000 to NT$550,000, claiming the papers would boost their prospects for promotion.

In 2017, Taiwanese media revealed that Kaohsiung’s Fortune Institute of Technology in Kaohsiung and Changhua County’s Chung Chou University of Science and Technology enrolled more than 100 middle-aged Aborigines to inflate enrollment numbers. The media dubbed them “phantom students” since they never attended a single class.

Further, “foreign workers masquerading as students and students with special needs are two disadvantaged groups used by private universities to help boost their enrollment numbers and get their hands on scholarship funding and subsidies,” alleges a September 2017 opinion piece in the Taipei Times by Fu Jen Catholic University sociology professor Tai Po-fen.

The article also alleges that a management school in southern Taiwan “symbolically enrolls 150 students each year.” That school reportedly aims to transform itself into a corporate training academy, but continues to receive subsidies available to educational institutions.

Noting that “some abnormalities” with regard to enrollment in Taiwan’s university system, Minister Yeh says that the MOE has set up a system to regulate underperforming schools each academic year. Schools at high risk, based on enrollment and other risk indicators, are put on a watch list. If a school remains on the watch list two years in a row, the government will “sternly request the school improve and return to a normal state of operation,” he says.

Given Taiwan’s stagnant population growth, only an influx of foreign students can prevent university enrollment from cratering. The Ma Ying-jeou administration initially looked to China for foreign students. In 2007, a year before Ma took office, roughly 800 Chinese students were attending Taiwanese universities. By 2015-16, at the end of Ma’s second term, there were over 34,000.

Since then, Chinese student numbers have not grown significantly. Beijing has likely sought to limit educational exchanges with Taiwan as part of a concerted campaign to pressure the pro-independence ruling Democratic Progressive Party (DPP), analysts say. The DPP has irked Beijing by rejecting the idea that Taiwan and the Chinese mainland are part of the same whole: “One China.”

As a result of the current political situation, “the number of students from China is not predictable,” says Yeh.

As to quality, in some circles the Chinese students have a reputation for academic excellence, notes TIER’s Chiu. He recalls a recent visit to Providence University in Taichung. At the lecture he attended, two Chinese students were the only ones who asked the speaker questions. “They asked intelligent questions – they seemed eager to learn,” he says. “Local students appeared less engaged.”

However, historian Yang notes that Taiwan has not necessarily attracted China’s best students. “Some come to study in Taiwan because they can’t get into a good school in mainland China,” he says.

Under the Tsai Ing-wen administration’s New Southbound Policy, Taiwan is increasingly turning its attention to students from Southeast Asia. Roughly 38,000 of the nearly 118,000 international students enrolled at Taiwanese universities last year were from ASEAN countries, up from 28,000 in 2016, according to the Ministry of Education.

Andy Do, a Vietnamese national, decided to study in Taiwan instead of South Korea. While both countries excel in tech hardware manufacturing, Do chose Taiwan because he was offered a full scholarship and living stipend. He went on to earn a Master of Computer Science degree from Dayeh University in Changhua.

He lauds the program and its faculty. “The professors have good qualifications; many have experience in the U.S.,” he says. “They provided us with many opportunities to do hands-on projects.”

Now a permanent resident of Taiwan, Do works as a process integration engineer at the Taiwan branch of Garmin International, an American GPS technology company.

Meanwhile, as it accelerates the New Southbound Policy, the Tsai administration aims to bring 58,000 students from ASEAN countries to Taiwanese universities by 2019. To help accomplish that objective, it will increase scholarships.

The push to attract Southeast Asian students to Taiwan actually began during the Ma Ying-jeou presidency. From 2008 to 2015, their numbers surged almost 125%, from just under 12,000 to almost 27,000.

“The Ma administration was interested in Southeast Asian students, but just to fill spaces at our universities,” says Alan Hao Yang, executive director of the Taiwan-Asia Exchange Foundation and the Center for Southeast Asian Studies at National Chengchi University. “The Tsai administration sees them as vital in strengthening Taiwan’s links to Southeast Asia.”

Taiwan Business TOPICS

Taiwan Business TOPICS is published monthly by the American Chamber of Commerce in Taipei, and covers current topic affecting business conditions in Taiwan, an Industry Focus section on a particular industrial sector, and other reports prepared by the magazine’s staff of experienced professional journalists.